More than 4.1 million cars, sedans and utility vehicles were sold in the domestic market last year, an 8.2% increase from the 3.79 million vehicles sold in 2022, showed data from industry body Society of Indian Automobile Manufacturers (SIAM) issued on Friday. Growth was powered by demand for utility vehicles, which comprised 57.4% of total sales.
“Year 2023 has been reasonably satisfactory for the automobile sector, as passenger vehicles, commercial vehicles and two-wheelers posted single digit growth, while three-wheelers have made a very good recovery. Various schemes of the government of India that have been operational now, are showing good results, and are also helping the auto industry to seamlessly transform to new powertrain realms,” said Vinod Aggarwal, president, SIAM. Automakers in India mostly report wholesale dispatches from factories to dealerships and not retail sales to customers.
In the commercial vehicle segment, sales grew by 4.8% to 978,385 units while two-wheeler sales rose 9% to more than 17.07 million units last year. Agarwal said the automobile industry “is optimistic that the growth momentum would continue in 2024 as well.
Meanwhile, December 2023 saw a 4% increase in local passenger vehicles to 286,390 units from 275,352 units a year earlier. Sales of three-wheelers and two-wheelers grew by 31% (50,537 units) and 16% (over 1.21 million units) respectively during the month.
Aggarwal said there are indications of a recovery in the rural markets, which is likely to support demand going ahead. “If you look at the two-wheeler sales data, last quarter volumes grew by 23% compared to 10% for the first nine months of the fiscal year. This indicates the rural economy is going better.” While this bodes well for two-wheeler makers, healthy economic activity, strong replacement demand and robust government spending on infrastructure projects is expected to sustain the growth momentum in commercial vehicle sales.